Within hours of the September 11 terrorist attacks on New York City and
Washington, D.C., economists were asking whether the already weakened U.S. and
Canadian economies could recover from an assault on their aviation systems. So
the symbolism was obvious when, within days, the line snaking through Terminal A
at Reagan National Airport was not passengers, but job seekers at a temporary
employment center set up by the city of Arlington, Va.

The shops and restaurants along the airport’s gleaming concourse sat idle
while federal agencies and other interested parties, including ALPA, debated the
wisdom of reopening an airport in the front yard of the White House and
Congress. But the shuttered businesses that depended on the airport conveyed a
message few could mistake: as aviation goes, so, largely, goes a nation’s
prosperity.

Reagan National, to the relief of most, reopened for business with limited
operations on October 4, but the U.S. and Canadian aviation systems are far from
fully recovered. Whatever the economic prognosis, ALPA members will feel the
effect, through layoffs or perhaps more permanent changes to their carriers.

‘Raw survival’

Airline industry analysts have projected layoffs throughout the industry to
reach 100,000 as a result of the attacks of September 11, with a proportional
number coming from the pilot ranks. ALPA’s vice-president–administration, Capt.
Jerry Mugerditchian, who helps coordinate ALPA services for furloughed pilots,
said in mid-October that the exact layoff numbers were still uncertain. But they
could number several thousand.

"Those of us who’ve been in the U.S. airline industry for some time know that
it has always had economic turns —highs and lows," Capt. Mugerditchian said. The
industry might have been in a downturn before September 11, but, he said, "it’s
in freefall now."

ALPA departments that steeled themselves to help members cope with the
industrial fallout from September 11 saw countless carriers scrambling to adjust
to the new landscape. "It’s just basic, raw survival," Capt. Mugerditchian
commented.

ALPA is no stranger to layoffs (see chart, page 13). But, until earlier this
year, the U.S. airline industry, along with the rest of the country, had been
enjoying almost unprecedented prosperity. Since January 2000, ALPA had seen only
a small number of carriers (primarily cargo carriers) furlough pilots or go out
of business entirely (see chart, page 14). Shortly after September 11, one
airline (Midway) became a casualty, and since then, more than half of the
ALPA-represented carriers have at least discussed layoffs.

"I think every airline is changing its furlough projections on a daily
basis," Capt. Mugerditchian said in mid-October. "They don’t really know how the
industry will be affected. They’re trying to understand how to control their
capacity, costs, and cash flow. I believe that’s why we have so much uncertainty
in terms of furlough numbers. We hear major airlines project large numbers, and
then the number is reduced. They haven’t sorted it out yet. They’re just trying
to stay aloft with their cash flow problems while trying to determine what their
capacity should be."

Many veteran ALPA pilots are familiar with the industry’s mood swings and
know firsthand the pains of a layoff, Capt. Mugerditchian said. A pilot for TWA,
Midway, and then United, he has been furloughed twice for a total of more than
11 years. But, he added, "I’ve never seen anything like this."

The U.S. carriers also lobbied the Administration and Congress for a
financial bailout, which also figured into their equation for survival.

After much haggling, U.S. lawmakers agreed to provide $15 billion —$5 billion
in grants and an additional $10 billion in loan guarantees.

One of the criteria to obtain preferential consideration for the latter was
for carriers to demonstrate they had at least tried to obtain concessions from
employees and other stakeholders.

In Canada, following much prodding from ALPA and other advocacy groups,
Transport Minister David Collenette said that the government would provide $160
million (Canadian) to help the airlines, with $100 million (Canadian) of that
expected to go to Air Canada.

A measured response

In the weeks after the attacks, while the U.S. and Canadian airline
industries continued to sort through the chaos of changing security measures and
depressed passenger loads, ALPA’s response was well-prepared, measured, and
professional.

Close on the heels of establishing a Security Task Force, the Association set
up a Task Force on Collective Bargaining to address the representational issues
that were sure to grow out of an industry in crisis.

ALPA Director of Representation Seth Rosen was tapped to head the Collective
Bargaining Task Force on the staff side.

Task Force members, scattered all over North America while the air
transportation system was still locked down, held their first conference call on
September 14 and their first conference call with pilot representatives of the
largest carriers ALPA represents 3 days later, Rosen notes. "The idea was to put
together a task force similar to the one that was working on security because,
while security was the first thing we had to deal with, we knew the
ramifications on the industrial side were going to be immediate. We could hear
it from some of the calls we were getting from some of the larger carriers—Delta
and Continental, for example. Management was a little bit panicked, uncertain."

The Task Force has worked on four tracks—larger carriers, express and smaller
carriers, cargo and miscellaneous carriers, and Canadian carriers —to monitor
the issues specific to each sector.

Gathering intelligence

Weekly conference calls among ALPA contract administrators, pilot group
negotiators and representatives, and staff members from the Economic and
Financial Analysis, Representation, Retirement and Insurance, Legal, Government
Affairs, and Communications Departments, as well as ALPA’s outside counsel,
Cohen, Weiss and Simon, gathered and analyzed extensive data.

The "intelligence gathering" was critical, Rosen says. This effort worked "to
facilitate information exchange among the various pilot groups on
airline-specific plans to respond to the industry crisis, including requests for
contractual relief."

The aim was to prepare the Association’s pilot groups in case those requests
for relief occur. As an example, "we made sure everyone understood ALPA’s
policies" on crisis and concessionary negotiations, Rosen notes.

The policies were those that ALPA’s Collective Bargaining Committee developed
during the post-deregulation era and further honed during the recession of the
early 1990s. "We’ve put these guidelines and policies into place over time; and
most carriers know that we’re not just going to provide concessions without
analysis and direction."

Some exceptions cropped up, of course—US Airways management, for instance,
demanded that the pilots agree to an immediate pay cut to avoid furloughs.
Management at CCAir, Mesa, and Sun Country "came at the pilots hard" for
contractual relief, Rosen says, while management at Champion, whose pilots are
still seeking their first ALPA contract, unilaterally cut pilots’ pay and
monthly guarantee.

In Canada, the situation was complicated by the ongoing merger discussions
among the airlines making up Air Canada Regional Airlines. Pilots of Air Canada
(represented by an independent union) had furlough protection in their
collective agreement.

The smaller airlines in Canada have limited furlough protection. At press
time, Air Canada Regional was expected to furlough approximately 260 pilots. Air
Transat and Calm Air had also announced furloughs, and a likelihood of furloughs
existed at Canada 3000.

Crisis and opportunity

By pulling together an overview of what was going on at all of ALPA’s
carriers, Rosen notes, "We were able to see our ‘trouble spots’ right away, to
see where we might need resources and could deploy teams immediately."

Many business students learn that the Chinese ideogram for "crisis"
incorporates the symbol for "opportunity." The Task Force has worked to make
sure that management actions during a period of possible risk to pilot contracts
were met with an effective, coordinated response.

All of its work has been "very focused," Rosen says. "We’ve dealt with what’s
happening on the operations side, what’s happening with furlough plans, the
companies who had invoked ‘force majeure’ [to avoid giving proper furlough
notice or pay in lieu of notice]. We had some issues with probationary pilots
being fired, which we cleared up."

In those instances in which ALPA believes the crisis has been unduly twisted
to provide opportunity, particularly on the invocation of force majeure, "We’re
collecting all the correspondence, because we could undoubtedly take some legal
action," Rosen says.

Legislative relief

On the legislative side, too, ALPA went full throttle to try to ensure, in
the financial scramble to shore up the carriers, that displaced airline workers
might get some sort of lifeline, too.

Along with other unions, ALPA pressed hard for legislation to extend
government help to the pinkslipped workers who were, in the words of Association
of Flight Attendants President Patricia Friend, "the economic victims of the
attacks." They fought hard to have included as part of the aviation security
bill a bill that Sen. Jean Carnahan (D-Mo.) introduced to extend the duration of
unemployment benefits for laidoff airline and airport employees, extend COBRA
insurance for eligible displaced workers, and make some employees eligible for
retraining.

On October 3, a contingent of pilots, flight attendants, mechanics,
reservations agents, and other union members from an array of AFLCIO
unions—ALPA, the AFA, the Communications Workers of America, the International
Association of Machinists, and others —rallied at the Capitol to demand
"fairness for workers" and lobby Congress not to neglect airline workers in the
rush to extend financial first aid to the airline industry.

ALPA’s president, Capt. Duane Woerth, noted the "patriotic fervor" that
followed the attacks on the World Trade Center and Pentagon and urged that the
contributions of the hundreds of thousands of workers in the U.S. airline
industry, many of them facing layoffs, not be discounted. "This industry has
fought for America," he declared.

As of this writing, the Carnahan amendment did not become part of the
Senate’s final aviation bill, but ALPA was pushing to ensure that some form of
help for displaced workers be included in other legislation or as part of the
Administration’s economic stimulus package. Aviation security issues, economic
relief for the industry, and help for airline workers are "our total focus right
now," says a spokesperson for ALPA’s Government Affairs Department.

Reworking the package

Meanwhile, the Association has deployed staff resources from the Membership
Services and Communications Departments to provide meaningful assistance to
pilots who have received furlough notices. The unique circumstances of the
airline industry since September 11 have forced ALPA to rework its traditional
furlough package, Capt. Mugerditchian added in mid-October.

"In the past, when we’ve worked with furloughed members or those who worked
for carriers that had ceased operation, we provided job fairs or regional
meetings because jobs were available," Capt. Mugerditchian said. "In this
downturn, in the wake of September 11, we’re not seeing opportunities in flying
that we have had in the past. Some corporate opportunities may exist, or foreign
opportunities with some nonscheduled carriers (though foreign carriers are
laying off pilots, too).

"But what we’re facing in most of these situations," he said, "is that
carriers will take you as a new-hire only if you agree to resign your current
seniority number," which would make a new-hire less likely to "jump ship" if the
industry were to improve and he or she were recalled.

Avolar, the business jet subsidiary that United Airlines has established, was
one of the potential employers reportedly imposing that condition, as well as
type-rating requirements, on applicants, Capt. Mugerditchian noted. ALPA was
cautioning job seekers to know all the conditions attached to an offer before
accepting new employment.

That this would be a very different ballgame, with very different rules, was
clear to the Association, Capt. Mugerditchian said. Many services that ALPA had
offered to furloughed pilots in the past "were not really applicable to the
current situation."

Consequently, the Association’s Communications Department developed a
Furlough Resource website that Association members can reach through their ALPA
Intranet personal home page.

Updated daily, the furlough web page includes links to all 50 states for
information on unemployment benefits, tips on information on buying short-term
major medical insurance and consolidating debt, and a list of current job
opportunities (along with some of the caveats in the current climate).

"This is the first time we’ve used the web for this purpose, and we’ve found
it’s the most valuable, timely tool to use in this rapidly changing situation,"
Capt. Mugerditchian added.

The U.S. and Canadian airline industries may take a couple of years to reach
some degree of normality after Black Tuesday, ALPA veterans agree. But the
industry will undoubtedly be very much altered—and not just in terms of
passenger screenings or fortified cockpits. "We may see further consolidations
through mergers or fragmentation," says Rosen. Some carriers may not survive, or
may sell off assets, as in the industry reconfigurations in the mid1980s and the
early 90s.

History does indeed repeat itself, particularly in aviation, "and we will
likely get through it again," says Rosen, despite the horrific events that
triggered the replay this time.

Before the
Storm, A (Relative)Calm

From January 2000 to the attacks on
September 11, most ALPA pilots’ careers were in a period of relative
stability. The slowing of the economy was most evident at ALPA’s
cargo carriers, most of which laid off pilots. The following chart
shows the furloughs for the period Jan. 1, 2000, to Sept. 11, 2001.